As global tensions rise, it gives way to volatility and uncertainty in the marketplace, which can disrupt production, consumption for the industry, transport and distribution, Glyn Hughes, Director General TIACA, said. The ocean freight market is facing disruptions due to attacks in the Red Sea. This has an impact on air cargo services as well. “As tensions rise the associated costs of transport rise as does the need for enhanced risk management and contingency planning.”
“As other supply chain transport modes get disrupted, the ingredients are there for further cost increases. With maritime avoiding the Red Sea routes, this results in additional costs of US$2 million for sailings from Asia to Europe. This may also lead to short-term peak for air cargo demand,” he added.
Last week, the UN Security Council called on immediate halt to Red Sea attacks amid rising costs for maritime trade, Hughes recalled.
“As we discovered during the pandemic, those who best plan for the unforeseen are those who best weather the storm. It is the ability to respond efficiently is the key driver for effective disruption management and therefore can keep costs under control as much as possible whilst keeping supply chains flowing. We are seeing the expansion of sea-air solutions as one example of short-term responses to keep shipments moving that may otherwise be delayed as maritime operations face continuing challenges. Air cargo’s ability to adapt is one of this industry’s greatest strengths,” he concluded.